Concept Of Housing Finance.

Hello and welcome to my blog today

Housing is one of the basic necessities of life. However, the capital required are dwelling such that individuals are not able to raise funds from their own savings. There is therefore the need and scope of the study of arrangement to supply loans and finance for the purpose of loan construction but for one reason or the other, the housing sector is underdeveloped.

Social and economic aspect of housing.
Housing remains a strategic asset to a man irrespective of the social economic status, colour, or creed housing has a way of bringing security to man such that there is none, every aspect of the man's life is affected. In Africa, one is not considered a man until he owns a house. Housing is a tool for social advancement and economic growth. This sector is historically used as a yardstick for measuring a country's economic and social development.

Developing housing conditions contributes to people's livelihood and society stand to drive economic benefit from investing in housing. Some of these benefits are;

1. Increases capital formation. It essentially means increase in the development capacity of investment or production.

2. Increase demand for local building products.

3. Increase incentive for savings.

4. Increases employment in building and relative activities.

5. Better worker's productivity as a result of better health and municipial services.

6. General economic activities as new employment increases per capital income generating multiplier effect.

7. More government tax revenue as the housing sector of the economy boosts.

Functions of the housing finance system.

1. Allocate the supply of loanable funds among householders including self employed and low income earners.

2. Mobilize savings into loan institutions.

3. Provide incentive for the capital markets.

4. Provide policy direction towards the allocation of resource withing the housing sector or other sector of the economy.

5. Stimulate appropriate regulation on housing construction.

6. Facilitate the flow of domestic and international resources into the priority housing categories in line with Govt. existing housing policies.

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